Gold
If inflationary pressures lead the Fed to keep rates high, gold's appeal as a non-yielding asset could diminish.
That's because paper currency can be devalued through monetary policy decisions, but gold's intrinsic value remains constant.
The gains are mainly attributed to the weakness in domestic currency against the dollar.
The senior advisor for President Donald Trump has shared a few posts to X criticizing the lack of annual audits determining the amount of gold there.
This should outweigh the drag from normalizing investor positioning, assuming uncertainty diminishes, Goldman Sachs added.
Spot gold was up 0.3% at $2,936.79 an ounce by 0828 GMT, taking its weekly advance to 2.7%.
The appetite for gold by central banks reached a major milestone during the previous year.
Bullion is considered a hedge against inflation, but higher interest rates dampen the non-yielding asset's appeal.
The European funds recorded the largest monthly inflows to ETFs since March 2022.
According to the gold trade body, the annual gold investments totalled 1,180 tonnes in 2024.
Meanwhile data from the World Gold Council showed global gold demand rose 1% to a record 4,974.5 metric tons in 2024.
The central banks played a crucial role in driving gold demand.
The Bloomberg Dollar Spot Index rose 0.1%, after a 0.7% loss on Tuesday. Silver and palladium dipped, while platinum edged higher.
Bullion is traditionally considered a hedge against both inflation and geopolitical uncertainty.